Distilling Venture Capital

When you read about startups or startup accelerators, you almost hear about teams of co-founders. That's because there most often, having co-founders is the right way to go. But can a solo founder succeed? What's a poor startup founder to do if s/he can't find the right co-founders? Just hang-out and wait? In this episode of Distilling Venture Capital, I look at these questions. Below are some of the articles and resources that I mention.

For the detailed show notes and bonus information about Nic Brisbourn go to MarkWKing.com/5

Startups Are Hard. Don't Go It Alone - Satay Patel, Homebrew Ventures

Building The Right Founding Team - Nic Brisbourne, Forward Partners

How Solo Founders Beat The Odds and Got Into Top Accelerators - Lora Kolodny for the Wall Street Journal

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Twitter: @TheMarkWKing

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VC decision making is one of the great mysteries of the business world. In this episode we look at the range of decision making models used by VC funds. Elizabeth Yin of 500 Startups wrote a great blog post on the topic. She was also generous enough to record some follow-up thoughts for this episode.

The secret behind VC partnerships…

The take home point is that venture capital funds fall on a spectrum with champion based decision making on one end and consensus models at the other. The key is doing your homework.

Bonus Info On Elizabeth Yin

Here's how Elizabeth describes herself: Partner at 500 Startups; Investor in seed stage companies and run the Mtn View accelerator. Formerly CEO / Co-founder of LaunchBit (acq '14) and marketer at Google. BSEE from Stanford, MBA from MIT Sloan.

• Twitter
• LinkedIn
• Blog
• 500 Startups

I can't thank Elizabeth enough for calling and leaving some answers to follow-up questions. She has a great blog and is very active on Twitter.

In this episode we look at advice from Hyde Park Angels and Rob Go of NextView Ventures about how to best pitch your startup to VCs or angel investors. We also look at what you can learn from a story Fred Wilson of Union Square Ventures tells about an entrepreneur who successfully convinced Fred to invest without a pitch deck at all.

Building The Perfect Pitch

Hyde Park Angels As part of their educational series Hyde Park's team created a great outline for the story your pitch should tell. The flow they suggest may be different than you would expect. But, it syncs with the way most venture capitalists and angel investors evaluate opportunities.

A Simple Approach To Startup Pitch Decks

Rob Go - NextView Ventures Rob Go and the NextView team have created two amazingly helpful templates for startup pitches: one for email and smaller meetings and a second for larger group settings (e.g. a demo day). I focus on the individual or small group format. Their format has tremendous versatility and does for startup pitches what responsive design and HTML 5 did for web sites. You can use content once and then adapt literally in the middle of a pitch to tailor it to your unique audience.

Here's the PowerPoint template It's hosted on DropBox. If you don't want to sign in there to get it you can go to SlideShare.net (just to manage expectations, they released it on SlideShare as a single PDF, not in an editable format for PowerPoint or Keynote)

As a little extra bonus here are some early pitches from companies you probably know. (yes...I know. Some are probably bootlegged and incomplete, but they're interesting none the less.)

• LinkedIn
• Buffer
• YouTube
• FourSquare

Best Seed Pitch Ever

Fred Wilson - Union Square Ventures Do you even need a pitch? Sounds like heresy. No self-respecting entrepreneur would pitch a startup without a deck. Fred says you can and has the story to prove it.

Bonus Information about Rob Go

Rob describes himself this way: "Here's a quick background on who I am: 1. My name is Rob, I live in Lexington, MA 2. I'm married and have two young daughters. My wife and I met in college at Duke University - Go Blue Devils! 3. We really love our church in Arlington, MA. It's called Highrock and it's a wonderful and vibrant community. Email me if you want to visit! 4. I grew up in the Philippines (ages 0-9) and Hong Kong (ages 9-17). 5. I am a cofounder of NextView Ventures, a seed stage investment firm focused on internet enabled innovation. I try to spend as much time as possible working with entrepreneurs and investing in businesses that are trying to solve important problems for everyday people. 6. The best way to reach me is by email: rob at nextviewventures dot com"

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• NextView Ventures
• Twitter @RobGO
• LinkedIn

Satya Patel of Homebrew, Steve Blank of lean startup fame and Aaron Harris of Y-Combinator wrote three amazing posts about founders, co-founders, founding teams and founding CEOs. In this episode, Mark W King explores their best thinking and explains what you need to know.

Start-ups Are Hard. Don't Go It Alone by Satya Patel, Partner at seed fund Homebrew Ventures

Satya does a great job explaining why founders need co-founders both for their own sake and the sake of their start-ups.

Building Great Founding Teams by Steve Blank, author of The Start-up Owners Manual

Lean start-up pioneer Steve Blank provides useful definitions for founder, co-founders and the founding CEO.

Co-founder Management by Aaron K Harris, Partner at start-up accelerator Y-Combinator

Small teams working in close quarters in high pressure situations always creates challenges. Aaron offers practical advice for how teams can be successful working together.

Bonus Material - More About Satay Patel

How he describes himself: "Currently Partner at Homebrew and guilty of tweeting food porn. Previously, VP Product at Twitter leading product management and support. Co-led seed and early stage Internet and digital media investing as Partner at Battery Ventures. Joined Google in 2003, working on various product management and partnership initiatives for AdSense. Senior product manager at DoubleClick, VC with two NY-based venture capital firms and a strategy consultant. Penn educated. Vegas raised. Married with children. Optimizing for happiness."

Blog: Venture Generated Content

Website: Homebrew Ventures

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LinkedIn

If you really want to understand a business figure out how it makes money. That's true for every kind of business. It's especially true in venture capital. Most people think about venture capital in terms of single deals. A VC's job is to essentially buy low and sell high. That takes a ton of work.

In future episodes we'll take a look at how an individual VC deal makes money. Ultimately, however, venture capitalists make their money by managing a fund of venture investments for other people. So that begs the question: How do venture capital funds make money? VCs get paid with a management fee (1-3%) that should cover the costs of keeping the lights on. It's a nice living, but not the reason someone becomes a venture capitalist. Venture capital funds get "carry" which is a share of the upside, usually 20% of profits. Carry is the brass ring. The lion's share of the money. The economic motive for VCs is to make a huge amount of money for other people and share in that success.

In this episode we look at three articles by venture capitalists that explain how the math works for a VC fund to be successful. The math is somewhat non-obvious. Take a listen and find out how it works.

Cem Sertoglu, Early Bird Venture Capital - VC Fund Economics

Cem Sertoglu provides a brief Cliff Notes style guide to venture capital fund economics. (HUGE apology to Cem for butchering the pronunciation of his name. My Turkish is non-existent and I couldn't find any pronunciations on the web. Sorry!)

Mark Suster, Upfront Ventures - How to Build a Startup & Understanding Venture Capital

Mark Suster goes more in-depth than Sertoglu. As part of his pitch at venture conference, Suster explained three things: the right mindset for founders, understanding how venture capital works and how to build a great team. His slides on how venture funds make money summarize beautifully. He's also very clear about why this matters to founders raising capital.

Benedict Evans, A16Z - In Praise of Failure

Evans lays out a PhD level class for understanding how venture capital funds really make money, and don't. The data he presents from Horsely Bridge blew me away. Not because of any surprise outcome, but because of the vast data set. There's not a lot of arguing about the conclusion: "Go way way beyond big or go home." I could not love this post more, unless we got to see the names of the 50%, (yes half!) of the funds in the data that failed to return 1X their investors capital.

Bonus Content - More About Mark Suster

How he describes himself: 2x entrepreneur. Sold both companies (last to @salesforce). Now @UpfrontVC looking to invest in passionate entrepreneurs.

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• Company Website
• LinkedIn
• Twitter

My interviews with venture capital's most successful failures have proven that the sage old advice from Kenny Rogers still applies:

"Ya gotta know when to hold 'em, know when to fold 'em, know when to walk away and know when to run."

It's not time to run, but it is time to fold up the Venture Capital Coroner's Report. I just can't get a steady enough supply of guests to keep going. If you want to hear the three reasons people declined to come on the show, listen to this six minute episode. You might be surprised.

I'm going to leave the shows up on iTunes and move them to my new website markwking.com You can share them with a friend or catch-up if you missed any episodes. You'll also find my new blog and podcast about impact investing and how lessons from the venture capital industry can change the world for better.

Lastly and most importantly, I want to again thank all my guests. The difficulty in getting people to say yes greatly heightened by appreciation of the people who did. You were gracious with your time, patient with the interview process and honest about your experience. THANK YOU!!

Mark W King

The post Know When To Fold 'Em appeared first on Venture Capital Coroner's Report.

As a serial entrepreneur Jeff Novich could spot a problem that meant opportunity. His Dad had one of those problems in his medical practice. Doctors' offices were drowning in paper and inefficient communication. Jeff and his dad saw an opportunity to disrupt how medical offices operate and at the same time improve patient care and satisfaction. It was a massive home run for Jeff's dad. But in less than a year Jeff walked away in frustration. Listen to this episode to find out who made him fail fast.

My Guest Jeff Novich describes himself as a "product manager who codes." He's worked on a variety of digital products including VocabSushi.com, FareShare, GroundLink and Grocket. He's applied his product expertise to educational technology, early ride sharing apps, medical communications and his current role is with ClassPass.com in the fitness space. He's also has the unique experience of having been through not one, but two, accelerator programs.

Jeff's credentials have that entrepreneurial quirkiness that lead to success. He started out with a degree in Physics and Computer Science from Johns Hopkins and then moved to the softer side of academics and got a Masters in Broadcast Journalism. For fun and relaxation, he's a regular hackathon participant. The Take Home Lessons Jeff and I had a wide-ranging conversation about product market fit and product market timing (the distinction is a key lesson), incubators and co-founders. Jeff's a classic product guy who learned a lot about the difference between a great product and a great company. Fortunately, he was able to fail fast and learn some valuable lessons.

He also shares candidly about what worked and didn't work in his two different Tech Stars accelerator experiences. Finally, the need for and value of a co-founder was crystal clear to Jeff and he shares his perspective on why the relationship worked so well at Patient Communicator. Resources & Links

JeffNovich.com Jeff on Twitter - @JeffNovich Jeff on LinkedIn

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Why a Venture Capital Podcast About Failure? From early childhood you've always heard the saying "Learn from your mistakes." In the venture capital industry you frequently hear "Fail fast" to learn and get to the right idea. Great advice. So, for this venture capital podcast I interview venture capital backed entrepreneurs about what they learned when their start-up didn't go as planned. I hope you can learn from their valuable experience.

The post Fail Fast! Jeff Novich On What Made His Start-up Fail At Launch appeared first on Venture Capital Coroner's Report.

What were you doing when you were 18? Nikki Durkin was finding co-founders, doing the Y-Combinator thing, raising venture capital, dealing with reporters, replacing co-founders, raising more venture capital and otherwise trying to grow her start-up. Listen in to find out what she learned when it all collapsed.

My Guest Nikki Durkin hails from Sydney, Australia. At the ripe old age of 18 she launched 99Dresses, an online exchange for used fashion. After starting in Sydney, she moved to Silicon Valley to participate in Y Combinator. While 99Dresses got its fair share of press, Nikki attracted more press than most entrepreneurs both because of her age and her gender. When 99Dresses ultimately failed, Nikki took the courageous step of posting two long articles on Medium.com, one about being a woman in the tech industry and the other about the emotions of failing. She discusses both with me on this episode of the podcast. The Take Home Lessons Unlike a lot of my conversations, Nikki and I spent less time on the lessons she learned about raising venture capital and managing and growing a start-up. She spoke candidly about her relationships with her co-founders and her family. She also offers a very balanced and candid perspective on being a young woman in the start-up tech game. Lessons she learned about these things in her late teens and early 20's are often missed or ignored by people twice or three times that age. Nikki's story reminds us that the people in our lives are ultimately what make any start-up story a success or failure. Resources & Links

Nikki on Twitter Nikki's article about closing down 99Dresses Nikki's post about Why I'm Sick To Death of Being A 'Woman In Tech'

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Why a Venture Capital Podcast About Failure? From early childhood you've always heard the saying "Learn from your mistakes." In the venture capital industry you frequently hear "Fail fast" to learn and get to the right idea. Great advice. So, for this venture capital podcast I interview venture capital backed entrepreneurs about what they learned when their start-up didn't go as planned. I hope you can learn from their valuable experience.

The post Co-founders, Paparazzi & Family…Oh My! Nikki Durkin on Start-up Relationships appeared first on Venture Capital Coroner's Report.

Gard Mayer's path as an entrepreneur has more twists & turns than a back road through the mountains. In this venture capital podcast he talks about huge success, complete failure & everything in between, pivoting his start-ups when reality set in

My Guest Gard leads Invodo's sales team, driving growth through expanding the client base and revenue while also growing relationships with existing clients. As one of the original founders of Invodo, Gard brings over 14 years of entrepreneurial experience to the company. Previously, Gard founded and operated SmartHockey Inc., where he established the initial manufacturing and distribution relationships as well as the management team. Gard earned a BA in English from Cornell University.

SmartHockey transformed off-ice hockey training with the introduction of the C|Saw Chassis (a.k.a. Bauer TUUK Rocker Chassis), SmartHockey Training Ball and a series of DVDs and Training Guides. SmartHockey products are used throughout the world by top professional teams and universities as a way for ice hockey players to train when they don't have access to ice. The Take Home Lessons Gard's path as an entrepreneur twists and turns as ideas succeed, fail and morph into new ones. Whether working as a solo inventor or as part of a venture capital backed team, Gard's story demonstrates that a large part of entrepreneurial success comes from responding to what's not working in a creative way and from seeing your start-up's pain points as opportunity.

Don't let early success give you a false confidence. Understand what external resources, relationships and market factors your start-up is dependent on. Two of Gard's products failed because they depended entirely on Google and Apple. Test your ideas, but use data and deadlines to make help decisions to avoid analysis paralysis. As start-ups evolve, don't underestimate the challenge of evolving the team. As Invodo evolved, numerous team members had to leave, including Gard's two co-founders. The perspective of new team members, in Gard's case a new CEO brought in by his venture capital investors, can seem radical. But that fresh, alternative perspective may be the key to success.

Resources & Links

Invodo SmartHockey Gard on LinkedIn Gard on Twitter Gard's 1st Patent for a "Roller skate with brake" Gard's hockey ball patent

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Why a Venture Capital Podcast About Failure? From early childhood you've always heard the saying "Learn from your mistakes." In the venture capital industry you frequently hear "Fail fast" to learn and get to the right idea. Great advice. So, for this venture capital podcast I interview venture capital backed entrepreneurs about what they learned when their start-up didn't go as planned. I hope you can learn from their valuable experience.

The post When Should You Pivot? Gard Mayer On Making Critical Decisions appeared first on Venture Capital Coroner's Report.

Peter Vilsholm Therkildsen Schlegel had a path. Get seed capital. Launch start-up. Join incubator. Finish program. Get capital from incubator's loan fund to build start-up. Sounded good to everyone...except one person at the loan fund. And did I mention the letter from the Danish immigration authority?

I'm Moving! Well sort of...just a new Twitter handle. I'm phasing out @VCCoroner and focusing on my personal handle @Mark_W_King. Click here for tweets about the podcast and other insights from venture capital's most successful. My Guest Peter has founded several companies, raising money from international venture capital funds and leading companies to international expansion and growth. As a consultant, he worked as a strategic adviser in four consulting firms, aiding clients grow their businesses globally. He led teams across domains and geographies, hiring and growing people of more than 15 different nationalities.

From 2008 to 2011 he was Chief Commercial and Strategy Officer for Agillic, a digital marketing agency. Then in June 2011 he left to launch Admazely. Admazely had an innovative technology that allowed small and medium businesses to take advantage of digital ad retargeting in a cost effective way.

After Admazely closed, Peter moved on to work with Magnetix, a digital marketing agency in Copenhagen for about two years. Recently, Peter began working with Responsive, an agency that specializes in creating digital experiences for its clients' customers. The Take Home Lessons

Need for plan B - Peter notes that while he'd carefully nurtured relationships with Accelerace's loan committee, he still got blind sided by their decision. No matter what people are telling you, you must have multiple alternatives for venture capital. Need for speed - During the very early product development phase, a rapid feedback loop is crucial. Peter believes hiring people with a somewhat longer time frame in mind, slowed Admazely just enough to cause problems. Need for clear view of personal trade-offs - Realize that blending being a start-up founder with family life can be super challenging. Need for a start-up founder's management skills - Peter has found that the value of entrepreneurial drive and vision in more mature companies is huge. Driving vision and momentum in a mature company can reap huge benefits.

Resources & Links

Peter's email PTS [AT] responsive [DOT] dk Peters new company www.responsive.dk Peter on Twitter @pschlegel The blog post that led me to Peter Peter on LinkedIn

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Why a Venture Capital Podcast About Failure? From early childhood you always hear the saying "Learn from your mistakes." In the venture capital industry you frequently hear "Fail fast" to learn and get to the right idea. Great advice. So, for this venture capital podcast I interview venture capital backed entrepreneurs about what they learned when their start-up didn't go as planned. I hope you can learn from their valuable experience.

The post Did The Check Clear? Peter Schlegel on Needing Multiple Plan B's appeared first on Venture Capital Coroner's Report.